The Nova Scotia Cap-and-Trade System

Published on November 08, 2018

The Federal Government has approved Nova Scotia’s cap-and-trade system, meaning that the cost of natural gas, gasoline, electricity, and heating oil will rise slightly over the next four years.

If the province had not put forward its own cap-and-trade system, it would have had a federal carbon tax placed upon it in 2019, joining the other provinces without a system that taxes emissions: Ontario, New Brunswick, Manitoba, and Saskatchewan.  

Stephen McNeil, Premier of Nova Scotia, has said that this is the best possible plan for Nova Scotians, and that the higher costs amount to much less than what would have been expected from the federal carbon tax.

As a result of the new provincial cap-and-trade system, the price of gas and heating oil is expected to increase by about $0.01 per litre, and natural gas is expected to rise by $0.01 per cubic metre.

The electricity bills of Nova Scotians are also expected to rise by about 1 percent a year, due to the increased costs.

According to the provincial government, the federal plan was set to have a larger estimated increase in costs, with heating oil rising $0.13 more per litre, and gas rising $0.11 more per litre between now and 2022.

Households in provinces that fall under the federal government’s carbon tax will be receiving rebates totalling 90 percent of the carbon tax money collected in their province, and the federal government estimates it will amount to more money in the pockets of the average homeowner than what they will have to pay due to the new tax.

Under the new provincial system, companies in Nova Scotia with high rates of carbon emissions will be able to purchase emission credits from other industries that fall below the capped carbon emission levels.

Western Climate Initiative Inc., the non-profit corporation in charge of the carbon credit trading programs in Ontario, Quebec, Manitoba, and California, will also be running the emission credit trading system in Nova Scotia, at an initial cost of $400 000 this year and approximately $300 000 a year for the years that follow.

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